Micron revenue forecast misses as PC chip prices remain low
By Lehar Maan and Arathy S Nair (Reuters) - Micron Technology Inc said it expects a further decline in prices of chips used in personal computers, and forecast revenue for the current quarter well below market estimates. Shares of the chipmaker, which also reported third-quarter profit and revenue below analysts' expectations, were down 13 percent after markets closed. Micron Technology makes both dynamic random access memory (DRAM) chips, used mostly in personal computers, and NAND memory chips for storing music, pictures and other data on smartphones, cameras and other mobile devices. The company said on Thursday it expects revenue of $3.45 billion-$3.7 billion, well below analysts' average expectation of $4.16 billion, according to Thomson Reuters I/B/E/S. "Part of the guidance miss is also because of NAND, it's not just DRAM," Summit Research analyst Srinivasan Sundararajan said. "Both in DRAM and NAND they are under-shipping the market, and they have adverse pricing in DRAM." Micron was spending more on making DRAM chips, trying to transition to new industry standards, Drexel Hamilton analyst Richard Whittington said. The company has been focusing more on DRAM chips for mobile phones and was also planning to launch 3D NAND chips that can store 16 times more data than chips available now. Despite a tepid outlook, analysts expect a pick up in DRAM prices as Microsoft Corp launches Windows 10 in July and phonemakers such as Apple Inc and Samsung <005930.KS> introduce new handsets. Selling prices of DRAM chips declined 10 percent in the third quarter ended June 4, while their sales volume remained "relatively flat", Micron said. Net income attributable to Micron dropped to $491 million, or 42 cents per share, from $806 million, or 68 cents per share, a year earlier. On an adjusted basis, the company earned 54 cents per share. Revenue fell to $3.85 billion from $3.98 billion. Analysts had expected a profit of 56 cents per share on revenue of $3.90 billion. Micron shares have fallen about 31 percent this year through Thursday. (Reporting By Lehar Maan in Bengaluru; Editing by Joyjeet Das)
